Two Countries Control 80% of the World’s Ethanol. Can India Break the Monopoly?

Ethanol fuel is a green, eco-friendly, and colourless fuel produced from the process of fermentation of sugar in plants. The major reason for switching to ethanol as a fuel source is that this particular biofuel brings greater environmental benefits compared to ordinary gasoline.

First, the addition of ethanol as a mixture to ordinary gasoline allows for reducing the emissions of greenhouse gases in the life cycle of fuel and reducing particulates from the exhaust pipes.

Furthermore, the octane rating of ethanol is greater than that of gasoline and gives better engine performance in cars. Nevertheless, ethanol contains 33% less energy content than pure gasoline. Hence, it reduces vehicle mileage by 3 to 5%.

Ethanol Fuel Usage All Over The World vs India

The global market for ethanol fuel is growing slowly but steadily and will rise from $117.36 billion in 2026 to exceed $183.23 billion by 2035.

Among the important trends in this market are the remarkable "Alcohol-to-Jet" investments boom aimed at transforming ethanol into Sustainable Aviation Fuel (SAF).

Moreover, Brazil made a record by becoming the first country to perform bunkering of deep-sea container ships with bioethanol at the port of Santos and raised its mandatory petrol blending level to E32.

On the other hand, despite being the world leader in terms of ethanol production, the USA continues to develop in the sector, as can be seen in the establishment of new plants by companies like POET.

India's Rapid Acceleration

India has been making a great deal of effort to reduce its reliance on imported crude oil by enhancing the ethanol programme in India. According to the Ministry of Petroleum & Natural Gas, India's average blend of domestic ethanol had increased to 20 percent or E20, by mid-2026.

This has been a major increase from 8.1 percent in 2021. In addition, automobile manufacturers such as Maruti Suzuki and Hero MotoCorp have said that tests were done extensively in millions of E20 engines which were not approved and no damage was found in them.

List of Countries Using the Most Ethanol Fuel

Below is a comparison of the top global ethanol producers:

Which Two Countries are the largest producers and Consumers of Ethanol Fuel?

The United States and Brazil are leading producers and consumers of Ethanol fuel in the year 2026. These figures have been taken from the World Population Review. 

The United States produces approximately 993.5 K barrels of ethanol and consumes 914.8 K barrels of ethanol per day. On the other hand, Brazil consumes all the ethanol produced by it, which comes out to be 475.3 K barrels of ethanol per day.

Coming down to the third position, we see India as the third-largest consumer of ethanol. Even though it produces 86.1 K barrels of ethanol per day, it consumes approximately 88.5 K barrels of ethanol per day.

Since India consumes almost 2,400 more barrels of ethanol per day than it produces, it needs to import ethanol to bridge this gap.

Can India Break the Monopoly of the USA and Brazil in the Upcoming Years? 

To overthrow the dominance of the US and Brazil, India has adopted a reverse strategy by switching its focus from food crops to agricultural residue.

The domination of the two nations is based on their large amount of corn and sugarcane. However, for India, this is an issue because of water resource scarcity and food security concerns.

India is investing heavily in building 2G refineries that will convert rice straw and other agricultural residues to ethanol, thus ignoring the food versus fuel debate entirely.

India has formed a Global Biofuel Alliance in a bid to establish a chain of production in partnership with other developing countries.

The US produces 993.5K barrels per day, Brazil 475.3K, and India lags behind by producing 86.1K barrels per day. Even if India cannot beat them in terms of figures, it can certainly dominate the global market.

How Is the US-Brazil Ethanol Monopoly Quietly Shaping India’s Fuel Prices?

Let us consider that the international market consists of just one huge local farmers' market. The US and Brazil are the leading farmers in this market, producing corn and sugar in bulk. Together, they produce 1.4 million barrels of ethanol per day.

India plays an insignificant role in this market because the country produces just 86.1 thousand barrels per day. Because both countries play a crucial role in this market, they set the prices of corn and sugar in the whole market. Any alteration in the prices of corn and sugar by either of them affects the other players in the market.

The effect of bad weather (The domino line)

For example, there is a major drought in Brazil, resulting in lower production of sugarcane. Because of the low supply of sugarcane in the market, the prices of sugar worldwide have risen. While there is production of sugarcane in India, the farmers of India would see that because of the higher prices of sugar in the world market, they too should raise the prices of their sugar.

Additional Cost Incurred by Indian Factories

However, Indian factories would now be required to purchase this locally produced sugarcane to produce ethanol. This is because of the increased global prices for raw materials. Consequently, the cost spent while producing each bottle of ethanol rises substantially.

The 20% Blending Requirement and Increased Costs

And this is where the 20% ethanol-blending comes into play. The Indian oil manufacturers are legally obliged to mix 20% of ethanol in each litre of petrol sold to customers.

While approaching these factories for ethanol, they are told, "Due to the increase in the price of sugarcane this month, there has been an increase in the price of ethanol."

The oil companies, who try to preserve their profit margin, don't pay this extra cost by themselves; instead, they pass this extra cost on to you in the form of high fuel prices at the petrol pumps.

In summary, a bad crop yield in Brazil and America leads to costly raw crops in international markets, costly production in India, and ultimately, an empty pocket at your local petrol station.